Leader of Schwab Advisor Services Calls on RIAs to Defend Vigorously against Complacency, Beware the Speed of Change and Make Calculated Decisions for Future Growth

Category:

Dateline:

Public Company Information:

NYSE:

SCHW

"The RIA industry needs strong future leaders and more diversity. There are also barriers to entering the industry, so we must work extra hard to increase the awareness of the RIA career path so that we can ensure a talent pipeline, and fuel your legacies for generations to come."

LAGUNA NIGUEL, Calif.--(BUSINESS WIRE)--Speaking from the main stage to a group of nearly 180 independent
registered investment advisors (RIAs) at its annual EXPLORE™ conference
today, Bernie Clark, executive vice president and head of Schwab Advisor
Services, commended them on their continued growth, noting that “the
industry is in a position of undeniable strength.” He also struck a tone
of urgency, telling advisors complacency has no place in the RIA
industry given the exponential increase in the speed of change and the
knowledge that the ways in which advisors compete and serve clients
today will be different tomorrow.

During the course of his remarks, Clark commented on the industry’s
success and the fact that RIAs have won the trust of clients --
evidenced by the average 97 percent retention rate1 of
clients year-over-year that advisors report and by the fact that client
referrals continue to drive organic growth.

“You continue to come out on top and I am confident you’ll continue to
win,” said Clark. “Your clients have voted with their most important
asset: their life’s savings and the financial well-being of their
families. What you have done resonates with them and motivates them to
refer their family and friends to you. With the wind at your back, you
have freedom to take calculated risks, but also a deep sense of
responsibility to make good decisions so your firms can continue to
grow.”

Clark’s optimism for the future of the industry is echoed by advisors.
According to the findings from the latest Independent Advisor Outlook
Study (IAOS), released
today from EXPLORE, 93 percent of RIAs believe the industry is on a
continued growth trajectory, with more than half (53 percent) saying the
industry has not fully matured and will continue to grow at a higher
rate than the market.

Navigating change: Technology and clients, talent and regulation

“External forces like changing demographics and regulatory uncertainty
can seem like remote threats as you go about the business of serving
clients and managing the growth you are experiencing today,” said Clark.
“But that doesn’t make them less important.”

To this end, Clark shared news and updates on several areas where
Charles Schwab is currently championing advisors’ interests in a
changing world, including:

Charles Schwab announced earlier this week the availability of a new
automated investment management platform, which was built to meet the
needs of RIAs, and will enable firms to reach broader market segments
and scale their businesses, while complementing the invaluable wealth
management services and client experience they provide today.

Institutional Intelligent Portfolios, sponsored by Schwab Wealth
Investment Advisory, Inc., offers RIA firms flexibility across portfolio
construction, ETF selection and branding for their clients’ experience.
Firms can create their own set of portfolios, reflecting their
investment philosophy and offering more than 450
ETFs across 28 asset classes and all major fund families. Those ETFs
represent more than 80 percent of the total ETF assets currently held by
advisors’ clients at Schwab, and cover nearly 100 percent of advisors’
clients’ assets invested in ETFs selected for the 28 asset classes
represented in Institutional Intelligent Portfolios.

“We understand that your clients want a relationship, and often, the
convenience of technology to enhance their experience,” said Clark.
”There isn’t a ‘one size fits all’ answer for how your clients want to
invest. You are entrepreneurs -- we know you will make this yours and it
will be exciting to see how you do it.”

Inaugural class graduates from Schwab Executive Leadership Program

Clark shared that 32 RIA firms have graduated from Schwab’s Executive
Leadership Program, which launched in 2014. The program is specifically
designed to prepare the next generation of RIA firm leaders, and an
additional 34 firms are currently participating in the second
consecutive year-long program.

Clark spoke about the critical importance of talent at all levels of a
firm, saying, “The RIA industry needs strong future leaders and more
diversity. There are also barriers to entering the industry, so we must
work extra hard to increase the awareness of the RIA career path so that
we can ensure a talent pipeline, and fuel your legacies for generations
to come.”

He noted that IAOS revealed that equity ownership is now offered
by 30 percent of firms today and, in larger firms, more than half offer
it, which “bodes well for development and retention and can help you
attract future leaders to your firm.”

IAOS also found that, as they seek to add staff, 57 percent of
RIAs consider it a priority to create a more diverse workforce (i.e.,
age, gender and race), including 28 percent who report they have already
taken action to hire diverse employees.

Advocating for RIAs on Capitol Hill

Clark reminded advisors of the importance of having their voices heard
and helping shape legislation and regulation.

“More than other external factors, regulatory changes can affect your
firm and put pressure on the foundation you’ve built,” said Clark. “Just
two weeks ago, we were in D.C. along with several advisors to help
educate Congress about the RIA model, so that those in Washington
understand issues like advisor examinations and the fiduciary standard,
and realize that the independent advisor businesses cannot be regulated
the same way as in the more traditional models.”

“The things I have asked you to think about today are, in my view, as
important as the choice you made to go independent,” said Clark. “My
commitment to you is that Schwab Advisor Services will lead – we will
work hard to create opportunities for you and bring you best practices,
technology and actionable insights that fuel growth.”

For general informational purposes only.

About the Independent Advisor Outlook Study

The Independent Advisor Outlook Study, conducted for Schwab
Advisor Services by Koski Research, has a 3.9% margin of error. Koski
Research is not affiliated with nor employed by Charles Schwab & Co.,
Inc. All data are self-reported by study participants and are not
verified or validated. Advisors participated in the study between April
28 and May 11, 2015.

At Charles Schwab we believe in the power of investing to help
individuals create a better tomorrow. We have a history of challenging
the status quo in our industry, innovating in ways that benefit
investors and the advisors and employers who serve them, and championing
our clients’ goals with passion and integrity.

Schwab Advisor Services™ serves independent investment advisors and
includes the custody, trading, and support of Schwab. Independent
investment advisors are not owned by, affiliated with or supervised by
Schwab.